|food outlook||No.2, June 2005|
|global information and early warning system on food and agriculture(GIEWS)|
Other relevant agricultural commodities
Banana import prices increased in Europe and North America in the first months of 2005 compared to the same period of 2004. The main reasons for this rise were reduced supply in several Latin American countries due to bad weather, high freight rates, firm demand in consuming countries and, in the specific case of the EU's new-member countries, the application since May 2004 of a banana import quota that is lower than their historical imports. However, import and export prices began to fall in March/April 2005, as production and exports rose in Costa Rica, Guatemala, Ecuador and Colombia, while demand remained stable in the main markets. Industry sources report that farm-gate prices in Ecuador decreased below the official minimum price of US$3 per box, and in some cases, fell to less than US$1 per box.
Coffee prices reached 101.44 US cents per pound in March 2005, a 67 percent increase compared to the level of 60.80 US cents per pound the corresponding month last year. In April 2005, the average daily price fell to 98.2 US cents per pound, following some profit taking by investment funds. Rising coffee prices were underpinned by stronger market fundamentals: reduction in output,growing world consumption, and an anticipated fall in stocks of green coffee worldwide. World coffee production in 2005/06 (October/September) is expected to reach 6.3 million tonnes, a decrease of 6.2 percent over 2004/05. In the main producer countries, Brazil and Viet Nam, the 2005/06 outputs are expected to decline by 18 percent and 11 percent respectively, which could lead to a continued upward trend in world prices for the rest of the year. Provisional returns indicate a 27 percent increase in global export earnings in 2004, suggesting that exporting countries might be recovering from the coffee crisis of the past five years (see Box).
World cocoa production is estimated to reach 3.2 million tonnes in 2004/05 (October/September), down from 3.4 millions tonnes in 2003/04, mainly as a result of lower than expected harvest in major producing countries including Côte d’Ivoire, Ghana and Indonesia. However, world cocoa grinding is forecast to grow by about 1 percent to reach 3.2 million tonnes in 2004/05, resulting in a 3.5 percent fall in stocks and a stock to grindings ratio of 42.3 percent, compared to 44.2 percent back in 2003/04. Against this anticipated market development, and concerns over continued unrest in Côte d’Ivoire, world cocoa prices increased from 67.35 US cents per pound in October 2004 to 79.72 US cents per pound in March 2005, before declining to 71.94 US cents per pound in April 2005. World cocoa prices should consolidate around 68-73 US cents per pound for the rest of the crop year.
World tea production in 2004 (January/December) reached 3.2 million tonnes, about 2 percent higher than 2003, largely as a result of favourable weather conditions. Increased output in major producer Sri Lanka, Kenya and China more than offset declines in India and Bangladesh. The FAO Composite price averaged US$1.65 per kg in 2004, about 9 percent higher than 2003. Prices were supported by rising tea quotations in Sri Lanka, which more than offset the depreciation of the Sri Lankan Rupee against the US dollar, and by the decline in the averaged tea prices at the Mombasa auction. The FAO composite Price in March 2005 averaged US$1.71 per kg, a 9.6 percent increase over the price reached in February, largely due to firm demand against smaller traded volumes in Mombasa and Calcutta auction markets. In April, the FAO composite price fell to US$1.63 per kg, slightly higher than the seasonal average for April which was US$1.59 per kg over the last 6 years.
The Cotlook ‘A’ Index, an indicator of world cotton prices, has recovered gradually from its low of US$1.12 per kg at the end of 2004 when record output was reported in the major cotton producing countries including Brazil, China, India, Pakistan and the United States. The world cotton price increased to US$1.25 per kg in early May 2005 largely due to the expectations of lower world cotton production in 2005, following reduced plantings in response to low prices in 2004 and of moderate increase in demand. The prediction that China would import nearly 3 million tonnes of cotton in 2005/06, a 60 percent increase from its actual imports in 2003/04 because of projected lower domestic production and higher mill consumption also provided support to the world price recovery over the past few months.